[RAM] RAM Ratings affirms Malaysian Life Re's AA3/Stable/P1 ratings

RAM Ratings has affirmed Malaysian Life Reinsurance Group Berhad’s?(Malaysian Life Re or the Reinsurer) AA₃/Stable/P1 insurer financial strength ratings.

The affirmation reflects the Reinsurer’s established market position in the domestic life reinsurance industry and still-healthy credit metrics despite near-term earnings pressure. Malaysian Life Re posted a pre-tax loss in 1H fiscal 2026 against a small pre-tax profit in the corresponding period last year. The weaker result was driven mainly by mark-to-market losses on its bonds and sukuk investments, upfront reserving for its medical portfolio, and adverse discounting effects arising from elevated bond yields. Full-year earnings are projected to be modest, although the anticipated release of reserves in 2H 2026 should provide some relief. We draw comfort from Malaysian Life Re’s planned repricing of its medical treaties next year, which is expected to alleviate reserve strain and support a return to profitability.

Capitalisation remained strong, with Malaysian Life Re’s capital adequacy ratio (CAR) comfortably exceeding both the regulatory minimum of 130% and its individual target capital level as at end-June 2026. Bank Negara Malaysia’s revised risk-based capital framework (RBC2) is expected to reduce the Reinsurer’s CAR, although the extent of the impact remains uncertain pending the issuance of the finalised policy document. Malaysian Life Re continued to adopt a prudent, liquidity-focused investment strategy, with unit trust funds accounting for 90% of its investments as at end-March 2026. Its investment yield had, nonetheless, weakened to an annualised 2.5% in 1H 2026 from around 4%-5% in 2023-2025, mainly reflecting mark-to-market losses as bond yields rose.

Malaysian Life Re pioneered the domestic life reinsurance industry in Malaysia and remains the country’s only domestic life reinsurer. It is estimated to command around a quarter of domestic life reinsurance premiums. Its adjusted market share exceeds one-third after excluding three life insurers whose internal policies restrict cessions to the Reinsurer. That said, the Reinsurer’s scale remains modest relative to Malaysia’s direct life and family takaful sector, with total assets of just over RM1 bil versus the sector’s RM423 bil.


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